Abu Dhabi bullish on green hydrogen

31 October 2024

 

Abu Dhabi is looking at three green hydrogen technology tracks as the UAE capital pushes ahead with an ambitious plan to become a global clean hydrogen production hub and capture up to 5% of global demand by 2033.

"The first track is ammonia, the second is liquid hydrogen and the third track is liquid hydrogen organic carriers," Mohammad Abdelqader El-Ramahi, chief green hydrogen officer at Abu Dhabi Future Energy Company (Masdar), told MEED during the inauguration of steelmaker Emsteel's pilot green hydrogen project in Abu Dhabi on 28 October.

"We plan to transport our hydrogen products in the shape and form that they are going to be used [by offtakers]," he adds.

On behalf of Abu Dhabi Inc, Masdar is mandated to develop green hydrogen projects within the boundaries of the emirate, according to Abu Dhabi's low-carbon hydrogen framework developed by the energy department.

It will have a majority share in all green hydrogen projects developed in Abu Dhabi, in addition to developing renewable energy – or green electrons – required to produce about 1 million tonnes of green hydrogen within a decade. 

The same law, which took effect at the beginning of the year, designates Abu Dhabi National Oil Company (Adnoc) as a co-investor in low-carbon hydrogen generated from fossil fuels with carbon capture, utilisation and storage. 

Masdar has already signed preliminary agreements with some of the biggest energy firms and offtakers, as well as with potential investors and developers of projects that will be set up in the so-called hydrogen valleys that are planned in Ruwais and Khalifa Economic Zones Abu Dhabi (Kezad).

Read: Firm to build $272m UAE hydrogen equipment plant

Abu Dhabi envisages different low-carbon hydrogen production technologies to be collocated in these valleys to drive system-wide cost optimisation, including sharing infrastructure and facilities.

"Abu Dhabi and Masdar welcome strategic long-term partnerships and foreign direct investments by major players in the energy transition sectors … that bring the best value to enable the lowest levelised cost of hydrogen," says El-Ramahi.

"We also welcome co-investors and technology providers that can participate in consortiums to ensure reliability, business continuity and the lowest levelised cost of hydrogen or ammonia."

So far, the list of Masdar's potential green hydrogen partners includes Ireland-headquartered Linde; France's TotalEnergies; the UK's BP; Austria's Verbund; and Japan's Mitsui, Osaka Gas, Mitsubishi Chemical, Inpex and Toyo Gas.

"These projects will be developed via public-private partnerships. We encourage these long-term partnerships to promote low-carbon hydrogen in Abu Dhabi on a macroeconomic level, which will also open doors for us to invest internationally, because our mandate covers not only Abu Dhabi but globally."

El-Ramahi says Masdar's ambition aims to leverage its existing footprint and legacy in developing renewable energy globally to "explore new frontiers, and there is not a better chance in such exploration than these long-term partnerships based on mutual benefits and reciprocity".

Masdar is understood to have invested over $20bn in about 30GW of renewable energy capacity in 40 countries to date and aims to reach a gross capacity of 100GW by 2030.

Nascent sector

El-Ramahi is aware of the challenges plaguing the nascent industry. Few projects have reached financial investment decisions – either in the Middle East and North Africa region or globally – even though it is three or four years since the first megaprojects targeting demand centres in Asia and Europe were announced.

The average gestation period of these projects is at least four years and the onus will be on Masdar to figure out a way to shorten this.

"We need to be rational from the sector-readiness perspective. Readiness to develop such capacities, supply chain, logistics, technology, robustness, business continuity and reliability [takes time]. This sector is nascent … at the beginning of the launch of this sector a couple of years ago, people rode the wave and overpromised," El-Ramahi says.

"Now, with an understanding of the reality on the ground, many people are pulling away, which sometimes resonates negatively with decision-makers, but green hydrogen is real and low-carbon hydrogen is the future."

The executive is adamant that green hydrogen is the most important driver and enabler of net zero and decarbonisation, adding: "Very few people know that electricification alone can address no more than 30% of our decarbonisation [needs], even if we install all sorts of renewable sources."

Inevitable future fuel

Describing green hydrogen as the "inevitable future fuel", Masdar's strong Abu Dhabi government backing will be key to executing its mandate, notwithstanding potential rivalries with its GCC peers – particularly Oman and Saudi Arabia – and Egypt and Morocco further afield.

"History is made by achievements, not by promises," El-Ramahi says. "We have already overachieved … proving to the world that we can make commercial projects happen on the ground, and Abu Dhabi has always been a pioneer and first-mover in the energy sector."

Abu Dhabi intends to replicate its success in the energy sector's previous four waves – oil and gas in the 1960s, liquefied natural gas and anti-flaring in the 1970s, renewable energy in the 2000s, and nuclear energy in the 2020s – in the sector's fifth wave comprising low-carbon hydrogen.   

"We have made very rational steps in the past, our strategy does not endorse merely pouring money [into projects] or hiding subsidies … we don’t do that."

Build it and they will come

Given an extraordinary political will, Masdar and Abu Dhabi look set to develop or acquire what it takes to realise the ambition of becoming a global green hydrogen hub.

"We are working with the Industry & Advanced Technology Ministry to attract manufacturing companies and technology providers here in Abu Dhabi. This is in line with the government's decision, made over a decade ago, to transform into a knowledge-based economy, and we have been developing human capacity and attracting technology providers since then.

"It's not about putting money on the table – or under the table – in the form of subsidies … we do business realistically and transparently, and we want to compete against our own achievements on the ground," El-Ramahi concludes.

Related read: Decarbonising steel is hard to resist

Photo: Pixabay

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Jennifer Aguinaldo
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